Small electric setup. Need some advice.

I have been thinking about putting together a small(1-2 gallon) electric all grain setup to use in the winter because using my big burner in the garage isn't an option and neither is brewing in the house. I found some hot plates on sale and plan to make a small electric brew sculpture for the garage. I'm wondering if I should use a small drink cooler as a mash tun or if I should use a pot and direct heat it with one of the hot plates. Any advice is much appreciated.

Check out the eBIAB threads in the electric brewing section. If you are looking to do small 1-2 gallon brews, you can probably get away with using and induction hot plate, or a conventional hot plate, or a 120VAC 2000W element controlled by a simple PID set up you could probably get a 3-4 gallon system set up for fairly cheap.

I agree with Bsquared.

The bad part of using a cooler in this case is that assuming you're using a stainless valve in the cooler, this combined with some form of bazooka screen means the actual port your mash can flow out of the cooler through sticks out .5" to 1" into the cooler. This means you can't quite get 100% of the sugary-goodness out of the cooler when you're done mashing - even by tilting it. At this point you're going to lose at least .25 gallon in the bottom of the cooler (more depending on the cooler floor's surface area), which is a high percentage of a 2 gallon brew.